AXMIN Inc.
TSX VENTURE : AXM

AXMIN Inc.

June 12, 2006 09:15 ET

AXMIN Inc.: Feasibility Study Update-Passendro Gold Project, Central African Republic

TORONTO, ONTARIO--(CCNMatthews - June 12, 2006) - AXMIN Inc. (TSX VENTURE:AXM) is pleased to provide an update on the definitive feasibility study for the Passendro Gold Project (Central African Republic) which was initiated in January 2006 and given full board approval following a positive pre-feasibility study (see press release dated May 10, 2006). The basis for the definitive feasibility study is described in the executive summary of the pre-feasibility study as issued by the independent engineering group GBM Ltd. and filed on SEDAR (www.sedar.com) on June 9, 2006.

The pre-feasibility study, evaluated to a +/- 20% level of accuracy on costings, estimated a capital cost of US$110 million for a 3 million tonnes per annum operation producing an average 200,000 ounces per annum over a five year initial mine life at an average operating cost of US$184 per ounce. The study estimated a Net Present Value ("NPV") of US$136 million, using a constant gold price of US$500 per ounce at a 5% discount rate, based solely on the indicated resources available from drilling operations as at the end of December 2005 (being an indicated resource of 1.540 million ounces grading 2.6 g/t Au, giving rise to a probable reserve of 13.74 million tonnes grading 2.59 g/t Au for a total of 1.143 million ounces). The pre-feasibility study indicated that the NPV would increase by US$97 million to US$233 million on the same basis through the addition of a further 500,000 ounces at the same grade and configuration.

RESERVE AND RESOURCE DRILLING

AXMIN is currently undertaking an intensive drill program designed to develop sufficient additional reserves to sustain a minimum eight year mine life (i) through extensions along strike and at depth from the current five ore bodies, (ii) through the detailed definition of further deposits currently in the inferred resource category and (iii) through the drill definition of targets identified by surface geochemistry and wide spaced drilling. Since the December 2005 resource cut-off date an additional 340 reverse circulation ("RC") drill holes totalling 14,000 metres plus 65 core holes totalling 7,000 metres have now been completed. Particular emphasis is being placed, in the near term, on infill drilling at 40 metre spacings at the Main Zone where some 550,000 ounces of gold are contained in previously announced inferred resources at a shallow depth of up to 60 metres and on infill drilling and re-drilling of additional deposits where previous poor core recovery or wide spaced drilling prevented inclusion within the pre-feasibility's probable reserves. The Company anticipates making an announcement during the third quarter 2006 on the additions to reserves and resources resulting from this Phase I feasibility study drilling, scheduled for completion at the end of June 2006.

Chief Executive Officer, Dr Jonathan Forster states "I am extremely pleased with the results we have achieved thus far during the Phase I drilling and especially in the continuity of the mineralised zones being demonstrated through the closer drill spacing. I am confident that as a result we will be able to convert a significant proportion of the previously announced inferred resources into the indicated category and on inclusion within engineered pits converted onwards to reserves. In addition we are already extending the known zones and have initiated the testing of new areas within the Passendro area from which we expect to develop new resources."

Drilling to further increase both the resources and reserves will continue non-stop into 2007, all within the 18 sq km Passendro Gold Project area. This Phase II drilling will concentrate on resource extensions at depth and around the known deposits where the mineralisation remains open below the general depth of current drilling of 80-110 metres and along strike where most of the deposits remain open. In addition, the Phase II drilling will address 3,300 metres of untested gold in soil anomalies and the extensions of the high grade shoots previously announced at Katsia. Reserves based on results available by March 2007 will be included in the definitive feasibility study.

Meanwhile the Company is conducting exploration on areas adjacent to Passendro and throughout the 140 km long greenstone belt within its Bambari-Bakala exploration licences, discoveries within which could feed the same plant. Results from this work will be reported as they become available.

TECHNICAL PROGRAM

The definitive feasibility study is scheduled for completion during the second quarter of 2007. Key sub-contractors have been selected for the hydrogeology, geotechnical investigation and design, mine design and planning, resource modelling and evaluation, for the environmental and social impact assessment and for the tailings dam and possible heap leach pad design, should this be included in the final design. Four companies have been short-listed to submit proposals for engineering and financial evaluation with the final selection expected later this month. A sub-contractor for the metallurgical testwork will be selected in conjunction with the chosen engineer. Baseline environmental studies were initiated in January 2006 and will continue until completion of the definitive feasibility study. Environmental and social impact assessment studies are scheduled to start in July 2006.

AXMIN is a mineral exploration company with a strong focus on gold in highly prospective properties across central and West Africa.

For more information regarding AXMIN visit our website at www.axmininc.com

Safe Harbour Statement

Certain statements contained herein, as well as oral statements that may be made by the company or by officers, directors or employees of the company acting on the company's behalf, that are not statements of historical fact, may constitute "forward-looking statements" and are made pursuant to applicable and relevant national legislation (including the Safe-Harbour provisions of the United States Private Securities Litigation Reform Act of 1995) in countries where AXMIN is conducting business and/or investor relations. Forward-looking statements, include, but are not limited to those with respect to the price of gold, the estimation of mineral reserves and resources, the realization of mineral reserves estimates, the timing and amount of estimated future success of exploration activities, AXMIN's hedging practices, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risk, title disputes or claims limitations on insurance coverage and the timing and possible outcome of pending litigation. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variation, including negative variation, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, possible variations in grade and ore densities or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes and other risks of the mining industry, delays in obtaining government approvals or financing or in completion of development or construction activities. Although AXMIN has attempted to identify important factors that could cause actual actions, events or cause actions events or results not to be anticipated, estimated or intended, there can be no assurance that forward looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Except as may be required by applicable law or stock exchange regulation, the company undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • AXMIN Inc.
    Jon Forster
    Chief Executive Officer
    +44 (0)1233 665600 (UK)
    +44 (0)1233 643728 (UK) (FAX)
    or
    AXMIN Inc.
    Judith Webster
    Manager - Investor Relations
    +1 (416) 368-0993 (Canada)
    ir@axmininc.com
    www.axmininc.com